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Tuesday, October 2, 2012

Born survivors — Exporter Magazine

New Zealand’s textile sector has much to contribute to New Zealand’s export drive. Dig just below the surface and you’ll discover a number of firms achieving remarkable results with minimal backing. In the lead up to the Textiles NZ Conference at Auckland’s Crowne Plaza hotel, Exporter highlights a ‘never-say-die’ industry that deserves far greater recognition and support.

If you’re a business involved in New Zealand’s textiles industry, you’re definitely a survivor. Unquestionably it’s one of the toughest sectors of all in which to thrive and the chances of success have not been helped by the mother of all recessions and our geographical position in the world.
But despite the historical upheavals in this once considerable industry there are still many shining lights, and more are needed. Nobody is more aware of this than Stephen Fookes, the incoming chairman of Textiles New Zealand (TNZ), the national association providing business support and services to the carpet, apparel, footwear and broader textile sector.
“There are fantastic textile businesses scattered across the country – many of them are based in the provinces and have been going for many years. We have one member who has been going since 1875!” he says.
Fookes finds it rather surprising, and inspiring, how successful New Zealand’s textile businesses are.
“Many have carved out a niche market internationally and are right on the leading edge, however they go well under the radar. Kiwi creativeness and talent produce some of the most innovative products in the textile world but they need help to get them into the international markets,” he said.
“We need to tell the world about what we have in our own backyard.
“For instance, did you know that we manufacture blankets in New Zealand that only go into the ultimate luxury export market? We also supply hats for Australian shows and international police forces and are the world’s largest manufacturer of sheep shearers’ jeans. Our yarns are on the Paris haute couture catwalks and our outdoor gear is being used at the North and South Poles,” he says.
Fookes has a big vision for the sector, as do the members of his organisation. Their goal is to see the textile sector rival the dairy sector in terms of contribution to New Zealand’s broader economy. Recent initiatives include TSEEP (Textiles Sector Energy Efficiency Programme), TNZ developing relationships with offshore trade commissioners, and collaborative marketing efforts – all of which has seen members growing their businesses, he says. “Everyone benefits from a thriving textile sector.”
Unfortunately ‘thriving’ is perhaps a word that has not been associated with the textiles industry for a number of years; but, believes Fookes, it’s primarily the lack of government support that has been holding the sector back.
“The textile sector today is populated by businesses that have survived. What that means is that our businesses have been through it all, and if they are in business in 2012, they are sturdy. Government support would be good but it is sadly lacking at the moment. We have the raw material in our back paddocks, in the bush or even growing on the side of the road – so why not develop the sector and put the effort behind it like we do for dairy?”
Fookes says many of New Zealand’s textiles businesses are big on product development and manufacturing and are leaders in their field. However, they are short of resources.
“It takes significant capital and human resource to enter a foreign market and if you are thin on the ground it is almost impossible to grow offshore markets. The sector needs assistance in entering and expanding offshore markets – some sort of collaborative model.”

Dispelling some myths
Fookes strongly believes it’s a myth to think that ‘the guy down the road is the competition’. “He’s not! The competition is offshore sitting on the buyer’s doorstep; they come from Europe, the Middle East, the Far East,” he says. “The only way for us to survive in a global economy is to work collaboratively – the pie is big enough for everyone to get a slice.
“Following on from that, our competition is with ourselves, not an exchange rate or some Far Eastern country. If New Zealand is to maintain or improve its OECD standings, for example, we need to be adding value to products and charging accordingly. One doesn’t go to Europe looking for quality at a bargain price.”
Another myth to dispel, he believes, is that we can’t manufacture products onshore.
“Many businesses that moved manufacturing offshore over the past decade or so are now bringing their operations back,” he says. “There is a distinct advantage being able to manufacture a product locally, in the same time zone, and with all communication in English.
“My advice is if you are going to have something manufactured, look at having it done here in New Zealand first before you go looking elsewhere. And if it’s a question of price, have a chat with the manufacturer about it; perhaps there is an alternative.”

Celebrating success
Fookes, who admits to being fascinated by the whole process of turning raw material into fabulous products, says it’s extremely hard to identify one single, outstanding export success story above all the others, especially when comparing the footwear, carpet, apparel and broader textiles sectors. But he says every one of those sectors has a story of a business overcoming extraordinary hurdles to achieve success on the world stage.
“From high-end luxury products going into the Middle East and Japan through to stock-standard products where New Zealand manufacturers outshine the competition on quality and reliability, there are so many successful export companies. Swazi, Hemptech, Betacraft, Hills Hats, Columbine, Weft, FibreTech, Jaedon Enterprises, Cambridge Clothing, Kiwi Socks, Northland Carpets – the list is a very long one.”
Fookes says New Zealand’s textile sector sits on the precipice of change.
“As a nation we need to invest in our own businesses and purchase their products when we can. If the US can turn around and say ‘No’ to having their apparel manufactured offshore and push to invest in onshore manufacturing, surely we can do the same,” he says.
“I believe the textile sector has, with broader support, the capacity to transform the national economy. We already have the sustainable raw material and the will; now all we need is the support.”

Hats off to HillsBoaters, busbys, deerstalkers, bicornes and tricornes, high fashion or steeped in tradition – if it’s a hat you’re after, you call Hills Hats. And it seems the whole world is calling them.

When Exporter caught up with Simon Smuts-Kennedy, general manager of Wellington-based Hills Hats Ltd, he was about to depart for Goulburn in New South Wales to measure 550 police recruits’ heads for new uniform dress hats. He tells me it’s just another example of winning contracts through providing exceptional service, not by being the cheapest price.
Smuts-Kennedy says they continuously delight their customers with their service delivery – the last time they supplied made-to-measure hats to this particular customer they were four weeks ahead of deadline. No wonder they get the repeat business, and clearly the Tasman is no barrier to service.
Hills Hats is one of New Zealand’s most enduring businesses – of that there can be no doubt.
It’s just 14 years since Smuts-Kennedy took possession of the business, but the company’s origins date back to 1875 when Chas Hill set up shop to import and manufacture sports caps.
Much of the machinery still in use today is 40 to 50 years old – because no modern machine can alter, stretch or block in the traditional format, says Smuts-Kennedy. The skilled staff at Hills Hats’ Petone factory tend to stick around too – with one staff member’s loyalty stretching back 30 years.
Smuts-Kennedy loves what he does – creating hats of all shapes and sizes and for all sorts of applications – military uniforms to high fashion to costumes for stage or film. In fact email him a photo of what you want, and after a couple of hours research on the Internet, he’ll produce exactly what you want.
But he hasn’t always been a hats man. Although his father and grandfather were involved in textile manufacturing (neckties and dressing gowns respectively), Smuts-Kennedy had been running a ski-shop in Ohakune. That was before Mt Ruapehu’s eruption put a dampener on things and forced him to take up the hats business opportunity. He moved his young family to Wellington and set about learning the headwear trade, which instantly appealed to his creative, innovative mind. Hills Hats at the time was making berets, cotton canvas bucket hats and the like, and Smuts-Kennedy admits that it was a challenge to reinvent what the company was doing at the time.
But a number of factors were about to come into play which would see Hills Hats transformed over the next ten years into one of the world’s leading specialist hat manufacturers.
Hats began to hit the fashion catwalks and emerging designers came to Smuts-Kennedy to help create the perfect accessory to their collections. Trilbys, fedoras, gorgeous dress hats, all manner of hats suddenly made it onto magazine covers. Film stars, musicians and young people, encouraged by the rise of social media, took to hats in ever increasing numbers.
Schools are buying his hats to keep students safe from the sun. Sports organisations are choosing his designs – think All Blacks to club rugby and the latest technical fabrics that are windproof, waterproof and breathable.
In the retail fashion market, Smuts-Kennedy is now so in tune with what his customer wants that he can front up with four or five new designs each time and know that they will choose to run with the majority of them.
Business, despite the world recession, has been looking up – aided by the company’s consistent focus on quality materials (such as the finest English tweeds) and superior finish, not to mention Smuts-Kennedy’s absolute passion for the trade. Even the Australians started taking notice – realising for once that beautiful hats needn’t come from Ireland or Scotland.
“The Aussies have even embraced the New Zealand-made aspect of our hats,” says Smuts-Kennedy, “because they’re sick of buying inferior Chinese-made versions.”
The corporate and government-related order books have also been full – think Air New Zealand pilots, the Army, Police, Department of Conservation. “Walk through any
New Zealand airport and you’ll go by up to five of our hats!” he says.
There’s strong competition out there, particularly in Australia and particularly when potential buyers shop on price alone. This is why Smuts-Kennedy is keen to promote their brand more in that market.
But the real challenge, he says, is to get even more people into headwear.
Nowadays the increasingly confident GM of Hill Hats is fronting up to customers all over the world – in 2011 he flew 80 times, including twice to Japan (where he has recently secured a major trial order of top hats and bowlers for a chain of hatters) and twice to the US (where customers include Village Hat Shop, the country’s largest online hat retailer).
Smuts-Kennedy acknowledges that future sales growth will primarily be driven by offshore markets, as well as a more diverse product offering. In a flat market where retail spend is down across the board, reinventing his hat range with new looks and shades is paramount.
In 2012 the signs are encouraging. Hills Hats is working with NZTE again for the first time in six years to ‘door-knock’ new markets. Interest from the UK and Europe is stronger than ever. The hat market internationally is exploding, as famous and funky hatmakers like Goorin Bros in the US engage with a whole new “anything goes, break the rules” generation. So last year when government spending went down, the fashion side of the business enjoyed healthy growth.
Hills Hats is also investing in its online marketing efforts, says Smuts-Kennedy, and is about to relaunch its website. Successfully marketing hats in 2012 is all about connecting with new customers via social media sites such as Facebook, and he spends a lot of hours doing his homework online.
Perhaps if he was still alive old Chas Hill would get a chuckle out of that. And he’d no doubt take his hat off to the current management at Hills Hats in response to their export efforts.